Saturday, November 12, 2016

DEMONETIZATION (WITHDRAWAL OF 500 & 1000 Currency notes as Legal tender)

To set the context, I would like to state that I am not against fact, I am for Demonetization but in very bigger way...   1. Announcement of JANDHAN yojna was to my delight as it is the first step in combating corruption.   2. Announcement of electronic payment receipts (EPR )for government departments as a part of DIGITAL INDIA has enhanced my spirit in journey towards corruption free country... 3. Passing of GST bill helped me believe that radical change is right around the we all know as to how GSTN executes this marvellous legislation.   4. Discussion of payment bank concept enhanced my enthusiasm....   5. Introduction of Unified Payment Interface (UPI) is another brilliant move providing identity of person sending and receiving money.   When our PM announced that new 500 and 2000 notes will be issued I was extremely disappointed... because combating corruption in India is IMPOSSIBLE with PAPER CURRENCY IN CIRCULATION   Reason 1 THIS IS NOT VACCINATION AGAINST DISEASE OF CORRUPTION (just an Anti biotic) The very fact that issuing new currency notes is ONE TIME MEASURE to clear existing black cannot stop black money creeping again... Example: traffic police will now take 2000 as bribe...for an offence ...   Reason 2 NUMEROUS WAYS OF COMPROMISING OBJECTIVE STILL EXIST This is because of the very fact that paper currency exists.   Very minute portion of innumerable ways of compromising objective are   1.Exchange of 500&1000 for 100 rupee notes was one of initial knee jerk reaction to the announcement...   2.Purchasing Gold and stacking it was another mode adopted to change form of black money...of course this will at least contribute 30% tax...if not penalties...   3.Using accounts of others and withdraw new notes....   In my view, Demonetization preceeded ONE CRUCIAL STEP....just one...     AVAILABILITY OF CYBER INFRASTRUCTURE to traders or service providers...   This includes   1. Availability of Branches of Bank/business correspondent in every village/town/city.   2. Incorporating world class cyber security throughout payment systems across india.   3. Introducing Digital Lockers wherein account holder details are mapped   4. Availability of POINT OF SALE terminals/E WALLETS to all traders/ service providers starting from farmers, hawkers, peddlers to everyone.   And for all those who believe it is impossible to materialize even in a decade here are few statistics ....There are around 120 crore population in approximately 25 crore households spread over 650000 villages/towns/cities.   1. As of 2nd November 2016,under jan dhan yojna 26 crore accounts have been opened and around 20 crore rupay cards issued...this number can be increased to provide card for all...and is already in progress...   2. Strengthening existing security systems can be done by conducting international conferences/seminars/idea contests etc. including all software engineers either employed or unemployed in India and also across the globe.   3. Including manufacturing of POS terminals and providing e wallet services under MAKE IN INDIA initiative to attract FDI as much as necessary thereby reducing unemployment atleast to some extent.   I would like to conclude that, had the announcement been made after an year or two and it did not include reissuing paper currency, it would have been the wolrd's most successful win in the battle over corruption. Thank you for reading...I am available at Please do communicate your views.. JAI HIND


  1. adirindi po.I too agree with ur views.....

  2. Well, Agree that this new plan has some deficits but we have to look at some good things that are gonna happen and hope for some new and improved things in future.

    PM Modi with all his officers and advisers must have had a picture of about whats gonna happen when he came up with this plan but i'm sure he was not 100 % aware of how things would turn up.

    Lets just say he's got a plan because he came up with a scheme to open bank accounts and after a while he introduced this plan. He's ready to face minor public fury about the currency exchange but determined to combat the bigger beast of black money. My best guess is his plan is not yet over as he tentatively spoke about more of his "schemes" being introduced after dec 30. This could be elimination of entire paper currency. So his motive would be
    1. devalue all the black money first.
    2. enforce non paper white money and prevent people from accumulating balck money in the first place.

    However, one of the first questions i got after i heard about this plan was

    why 2000 Rs? wouldnt it be easier for people who manage to exchange their black money with the help of their sources, store in lesser spaces?
    His office claims no one knew about this. even his cabinet. Is that possible. We all know BJP politicians could have lots of black money. If they didnt knew then he would face opposition in his own party and they would publicly express their anguish that Modi is behaving like a dictator.

    People always find ways to sneak past the system like this gold buying and exchanging currency with third parties with commission because even the dark side has brains and people think they're smart and its some kind of victory to evade the purpose of govt. Ofcourse who would like to lose crores of hard stolen money. its survival in their minds. I'm sure the govt's aware of these things by now and hoping Modi will counter this in his next plan.

    I'm sure Congress people would be banging their heads on their walls and they deserve it.

    Anyway, I welcome his decision to fight corruption and instead of making lofty promises he took firm action (may be first step in modern India). Inspite of my speculations, this decision could benefit the country a lot. I hope he keeps this spirit and come up with more revolutionary ideas and repair the country's economy.

    Next would be bringing down the dollar value. I know it would be contradiction to my interests that i'm staying in USA and wishing for downfall of dollar exchange rate (being my motive to earn dollars instead of rupees) but at this moment i feel this is the right thing at this situation.

    He should have a portal and welcome ideas from bright young minds and work on some promising ones.

    Finally, Prasad I like the concept of this blogging. I feel happy to write something this long and thought provoking concepts. Keep this up. Cheers.

  3. Even after the two weeks the line put of Banks are not controlled. this is a big Disadvantage of Demonetization In India